Free cash flow; effect of dividends paid; LBY Company total

4. Free cash flow can be utilized to
A. retire stock or debt.
B. acquire new assets.
C. pay additional dividends.
D. All of the above are correct.

5. The payment of cash dividends will
A. Increase the operating section of the statement of cash flows.
B. Decrease the operating section of the statement of cash flows.
C. Increase the financing section of the statement of cash flows.
D. Decrease the financing section of the statement of cash flows.

6. Company showed the following balances at the end of its first year: